UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________________ to ________________
Commission file number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including
area code: (
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
There were shares of the registrant’s common stock outstanding as of August 14, 2026.
TABLE OF CONTENTS
| Page |
| PART I – FINANCIAL INFORMATION | 3 | |
| Item 1. | Financial Statements (Unaudited) | 3 |
| Consolidated Balance Sheets | 3 | |
| Consolidated Statements of Operations | 4 | |
| Consolidated Statements of Stockholders’ Deficit | 5 | |
| Consolidated Statements of Cash Flows | 6 | |
| Notes to the Consolidated Financial Statements | 7 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 30 |
| Item 4. | Controls and Procedures | 30 |
| PART II – OTHER INFORMATION | 32 | |
| Item 1. | Legal Proceedings | 32 |
| Item 1A. | Risk Factors | 32 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 32 |
| Item 3. | Defaults Upon Senior Securities | 32 |
| Item 4. | Mine Safety Disclosures | 32 |
| Item 5. | Other Information | 32 |
| Item 6. | Exhibits | 32 |
| Signatures | 33 | |
| Exhibit Index | 34 | |
Unless the context otherwise indicates, when used in this report, the terms the “Company,” “Edgemode,” “we,” “us,” “our” and similar terms refer to Edgemode, Inc. and our wholly owned subsidiary, Edgemode, a Wyoming corporation. Our corporate website is www.edgemode.io. There we make available copies of Edgemode documents, news releases and our filings with the U.S. Securities and Exchange Commission including financial statements.
Unless specifically set forth to the contrary, the information that appears on our website is not part of this report.
| 2 |
PART I – FINANCIAL INFORMATION
| ITEM 1. | FINANCIAL STATEMENTS |
Edgemode, Inc.
Consolidated Balance Sheets
(Unaudited)
| June 30, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Intangible assets – cryptocurrencies | ||||||||
| Unsecured advances | ||||||||
| Deferred offering costs | ||||||||
| Right of use asset | ||||||||
| Construction in progress | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued payroll | ||||||||
| Convertible notes payable, net of discounts | ||||||||
| Notes payable | ||||||||
| Notes payable – related parties | ||||||||
| Deferred revenue | ||||||||
| Derivative liabilities | ||||||||
| Right of use liability - current | ||||||||
| – | ||||||||
| Total current liabilities | ||||||||
| Customer deposit | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Deficit: | ||||||||
| Preferred shares, $ par value, shares authorized; | ||||||||
| Series D Preferred Shares, shares authorized; Par value $; shares issued and outstanding, June 30, 2026 and December 31, 2025, respectively | ||||||||
| Common shares, shares authorized; Par value $; and shares issued and outstanding, June 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Stockholders’ deficit attributable to Edgemode, Inc. | ( | ) | ( | ) | ||||
| Non controlling interest | ( | ) | ||||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
See accompanying notes to the unaudited consolidated financial statements.
| 3 |
Edgemode, Inc.
Consolidated Statements of Operations
(unaudited)
| For the three months ended | For the six months ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative expenses | $ | $ | $ | $ | ||||||||||||
| Acquisition costs | ||||||||||||||||
| Loss on cryptocurrencies | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Change in fair value of derivatives | ( | ) | ( | ) | ||||||||||||
| Loss on settlement | ( | ) | ( | ) | ||||||||||||
| Other income | ||||||||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ||||||||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to non-controlling interest | ||||||||||||||||
| Net loss attributable to Edgemode, Inc. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per common share - basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per common share - diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding – basic | ||||||||||||||||
| Weighted average shares outstanding - diluted | ||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
| 4 |
Edgemode, Inc.
Consolidated Statements of Stockholders’ Deficit
For the six months ended June 30, 2026 and 2025
(Unaudited)
| Total Series D Preferred | Preferred Stock | Common | Additional Stock | Stockholders' Paid-in | Accumulated | Non- Controlling | Total Stockholders Equity/ | ||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Interest | (deficit) | ||||||||||||||||||||||||||
| Balance December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||
| Shares issued for cash, net of offering costs | – | ||||||||||||||||||||||||||||||||
| Shares issued for note inducement | – | ||||||||||||||||||||||||||||||||
| Shares issued for conversion of notes payable | – | ||||||||||||||||||||||||||||||||
| Shares issued for compensation | – | ||||||||||||||||||||||||||||||||
| Shares issued for exchange of options | – | ( | ) | ||||||||||||||||||||||||||||||
| Shares issued for cashless exercise of warrants | – | ( | ) | ||||||||||||||||||||||||||||||
| Relief of derivative liability upon conversion of convertible notes payable | – | – | |||||||||||||||||||||||||||||||
| Relief of warrant derivative liability upon exercise of warrants | – | – | |||||||||||||||||||||||||||||||
| Common stock options issued for Joint Venture- acquisition costs | – | – | |||||||||||||||||||||||||||||||
| Net loss | – | – | ( | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance March 31, 2026 | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Shares issued for cash, net of offering costs | – | ||||||||||||||||||||||||||||||||
| Shares issued for true-up obligation | – | ||||||||||||||||||||||||||||||||
| Shares issued for conversion of notes payable | – | ||||||||||||||||||||||||||||||||
| Shares issued for compensation | – | ||||||||||||||||||||||||||||||||
| Relief of derivative liability upon conversion of convertible notes payable | – | – | |||||||||||||||||||||||||||||||
| Imputed interest contributed to capital | – | – | |||||||||||||||||||||||||||||||
| Contributions to joint venture by non-controlling interest member | – | – | |||||||||||||||||||||||||||||||
| Net loss | – | – | ( | ) | ( | ) | ( | ||||||||||||||||||||||||||
| Balance June 30, 2026 | $ | $ | $ | ( | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Balance December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||||||||
| Stock-based compensation | – | – | |||||||||||||||||||||||||||||||
| Net Loss | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance March 31,2025 | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Shares issued for cash | – | ||||||||||||||||||||||||||||||||
| Shares issued for settlement of accrued salary | – | ||||||||||||||||||||||||||||||||
| Shares issued for asset acquisition | – | ||||||||||||||||||||||||||||||||
| Share issued for conversion of notes payable and settlement of derivative | – | ||||||||||||||||||||||||||||||||
| Share issued for compensation | – | ||||||||||||||||||||||||||||||||
| Stock options issued for settlement of accrued salary | – | – | |||||||||||||||||||||||||||||||
| Stock-based Compensation | – | – | |||||||||||||||||||||||||||||||
| Net Loss | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
| 5 |
Edgemode, Inc.
Consolidated Statements of Cash Flows
(unaudited)
| For the Six months ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization of debt discount | ||||||||
| Day one interest charge on derivative liabilities | ||||||||
| Interest charge added to principal for default on notes payable | ||||||||
| Interest charge for true-up shares issued | ||||||||
| Stock-based compensation | ||||||||
| Change in fair value of cryptocurrencies | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ( | ) | ||||
| Right of use asset amortization | ||||||||
| Depreciation expense | ||||||||
| Lost on settlement of notes payable | ||||||||
| Imputed interest contributed to capital | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Accrued payroll | ||||||||
| Customer deposit | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing Activities: | ||||||||
| Advance of unsecured funds in connection with proposed business acquisition | ( | ) | ||||||
| Cash used for development of leased properties | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Financing Activities: | ||||||||
| Proceeds from sale of common shares | ||||||||
| Proceeds from sale of common shares not yet issued | ||||||||
| Proceeds from convertible notes payable | ||||||||
| Payments on convertible notes payable | ( | ) | ||||||
| Repayment of related party advances | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ( | ) | ||||||
| Cash - beginning of period | ||||||||
| Cash - end of period | $ | $ | ||||||
| Supplemental Disclosures: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Supplemental Disclosures of Noncash Investing and Financing Information: | ||||||||
| Conversion of notes payable and derivative liabilities | $ | $ | ||||||
| Relief of warrant derivative liability upon exercise of warrants | $ | $ | ||||||
| Shares issued for inducement into convertible notes | $ | $ | ||||||
| Derivative liability upon note issuance | $ | $ | ||||||
| Amortization of deferred offering costs | $ | $ | ||||||
| Shares issued for cashless exercise of stock warrants | $ | $ | ||||||
| Common shares issued for conversion of common stock options | $ | $ | ||||||
| Establishment of right of use asset | $ | $ | ||||||
| Payment of expense by non-controlling interest owner | $ | $ | ||||||
| Shares issued for asset acquisition | $ | $ | ||||||
| Note Payable assumed for asset acquisition | $ | $ | ||||||
| Shares issued for settlement of accrued salary | $ | $ | ||||||
| Modification of stock options for settlement of accrued salary | $ | $ | ||||||
See accompanying notes to the unaudited consolidated financial statements.
| 6 |
Edgemode, Inc.
Notes to the Consolidated Financial Statements
(Unaudited)
NOTE 1 – Company Overview
Edgemode, Inc. (“we,” “our,” the “Company”) was incorporated in Nevada on January 21, 2011. Since its incorporation, the Company has attempted to become involved in a number of prior business ventures, all of which were unsuccessful and which it has abandoned. Our subsidiary, Edgemode Wyoming, was incorporated in the State of Wyoming in March 2020. Between 2021 and 2023, we attempted to become a key figure in Bitcoin mining but lacked the necessary funding to finance the purchase of Bitcoin mining hardware and hosting contracts. As a result, since late 2023 and throughout 2024, our business activities primarily consisted of identifying and evaluating suitable acquisition transaction candidates, which led to a transition from cryptocurrency mining to digital infrastructure colocation services and high-performance computing (“HPC”) hosting.
Effective April 7, 2025, Edgemode, Synthesis Analytics Production Ltd. (“SAPL”) and Adler Capital Limited (“ACL”) closed on the Share Exchange dated April 7, 2025 (the “Share Exchange”). In accordance with the Share Exchange, SAPL agreed to transfer 100% of SAPL’s outstanding capital stock to Edgemode in exchange for 1,260,246,354 shares of Edgemode common stock, par value $0.001 per share, which represented approximately 55% of the Company’s outstanding common stock at the Effective Time. The Company accounted for the acquisition as an asset acquisition under ASC 805 as SAPL did not meet the definition of a business as it did not contain a full set of integrated inputs and outputs at the time of closing.
Following the closing of the Share Exchange, Edgemode, through SAPL, its wholly owned subsidiary, intended to design, build, and operate digital infrastructure HPC with the goal of becoming a leading provider of digital colocation services. Pursuant to a letter dated December 8, 2025, and a complaint filed by the Company in the United States District Court for the Southern District of Florida, the Company intends to seek rescission of the Share Exchange and rescind the shares of Company common stock issued to ACL pursuant to the Share Exchange. The Company has sent notice to Dr. Adler for the termination of the option to purchase common stock issued to Dr. Adler under the Employment Agreement and the termination of such agreement for “cause” as defined under the agreement. Among other material breaches, without limitation, the Company has discovered that the real property and material assets of SAPL were encumbered at the time of the closing of the Share Exchange and remain encumbered and subject to liens.
On October 15, 2025, the Company and Blackberry
AIF (“BAIF”) entered into a memorandum of understanding (the “MOU”) for the purposes of organizing DC Estate Solutions
Cayman Limited, a Cayman Island entity (“DC Estate Solutions” or the “Joint Venture Company”) which was organized
by the Company on October 23, 2025. On November 6, 2025, DC Estate Solutions and BAIF entered into a share purchase agreement (the “SPV
SPA”). DC Estate Solutions was initially owned and controlled 75% by the Company and 25% by BAIF. The principal of BAIF is Jose
Mora. DC Estate Solutions has acquired five property leases, which were previously assigned to and held by BAIF, consisting of 100 hectares
of land each located in the Spain cities of Malpica, Caceres, Vianos, Cordoba and Torrecampo (the “Spain Leases”). The Spain
Leases are held by wholly owned subsidiaries of DC Estate Solutions. The Spain Leases are for an average term of 35 years at an initial
total average cost of $96,000 per month for all sites. As a condition of each lease, the payments are subject to meeting certain milestones,
such as obtaining favorable urban compatibility reports and connection points. Under the terms of the Spain Leases, the Company will pay
approximately $
| 7 |
Pursuant to the JVA, DC Estate Solutions shall
be owned
Further, effective January 27, 2026, the Company, BAIF and DC Estate Solutions entered into an addendum to the JVA (the “Addendum”) to account for the development of additional data centers in (i) Villasequilla, Spain 600 MW, (ii) Tomelloso, Spain 450 MW and (iii) Tocumen, Panama 1000 MW. The Villasequilla and Tomelloso data centers shall each be owned by Spanish special purpose vehicles, DC Villasequilla SL and DC Tomelloso SL, respectively, and shall subsequently be assigned to DC Estate Solutions. The Tocumen data center shall be owned by a Panamanian special purpose vehicle, DC Tocumen SA, which shall subsequently be assigned to DC Estate Solutions. The Company, in addition to the already agreed upon $125,000 USD monthly payments, agreed to fund the development of the additional Data Centers by paying a minimum of $2,400,000 USD payable in monthly installments of $100,000 USD to DC Estate Solutions commencing on May 1, 2026 for a minimum of 24 months, thereby increasing the minimum BAIF Funding amount to a total of $11,150,000 USD. The funds shall be distributed by DC Estate Solutions to BAIF. The Company also agreed to grant to BAIF, or its assignee, the Second Mora Option to acquire 150,000,000 shares of the Company’s common stock at an exercise price of $0.02 per share. The Second Mora Option is fully vested and exercisable as of the grant date and terminates on the earlier of (i) five years following the date of the Second Mora Option or (ii) the termination of the JVA.
On March 23, 2026, the Company, BAIF and DC Estate Solutions entered into a second addendum (the “Second Addendum”) to the JVA. Pursuant to the Second Addendum, the parties agreed to: (1) increase the capacity of the Spain-based data centers to 4,350 MW and (2) exchange the stock options to purchase an aggregate of 400,000,000 shares of common stock of the Company issued to BAIF or its assignees issued under the JVA for 400,000,000 shares of the Company’s restricted common stock to BAIF or its assignees with such shares being fully paid and non-assessable on the date of execution of the Second Addendum.
NOTE 2 – Summary of Significant Accounting Policies
Basis of presentation
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for our interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2025, as reported in the Form 10-K for the fiscal year ended December 31, 2025 of the Company, have been omitted.
Principals of consolidation
The accompanying consolidated financial statements include the accounts of Edgemode, Inc., the accounts of its 100% owned subsidiaries, EdgeMode Wyoming, Edgemode Mine Co UK Limited, and Synthesis Analytics Production Ltd. All intercompany transactions and balances have been eliminated in consolidation.
| 8 |
Variable Interest Entities
The Company evaluates its ownership interests and other arrangements involving legal entities to determine whether the entities are subject to consolidation under the variable interest entity (“VIE”) model in accordance with ASC 810, Consolidation. A legal entity is determined to be a VIE when, by design, either:
| · | The entity lacks sufficient equity to finance its activities without additional subordinated financial support; | |
| · | The equity holders, as a group, lack the characteristics of a controlling financial interest; or | |
| · | The voting rights of the equity holders are not proportionate to their economic interests and substantially all activities are conducted on behalf of an investor with disproportionately few voting rights. |
The Company consolidates a VIE when it is determined to be the primary beneficiary of the entity. The Company is considered the primary beneficiary when it has:
| 1. | The power to direct the activities that most significantly impact the VIE’s economic performance; and | |
| 2. | The obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. | |
| 3. | In determining whether the Company is the primary beneficiary, management evaluates qualitative and quantitative factors, including governance rights, decision-making authority, contractual arrangements, capital structure, sharing of economic risks and rewards, and related-party relationships. |
The Company continuously reassesses whether it is the primary beneficiary of a VIE as facts and circumstances change.
Assets and liabilities of consolidated VIEs are presented separately on the consolidated balance sheets where material. The interests of third parties in consolidated VIEs are presented as noncontrolling interests. Intercompany balances and transactions are eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results could materially differ from these estimates. It is reasonably possible that changes in estimates will occur in the near term.
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities.
The following table presents the effect of potential dilutive issuances for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Net income (loss) attributable to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Derivative gain associated with warrants | ( | ) | ( | ) | ||||||||||||
| Net income (loss) for dilutive calculation | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding | ||||||||||||||||
| Dilutive effect of common stock warrants | ||||||||||||||||
| Total diluted shares | ||||||||||||||||
| 9 |
For the three and six months ended June 30, 2026, potential dilutive securities of shares issuable upon exercise of options, and shares issuable upon conversion of debt, had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.
For the three and six months ended June 30, 2025, potential dilutive securities of shares issuable upon exercise of options, shares issuable upon exercise of warrants, and shares issuable upon conversion of debt, had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.
Segment Reporting
The Company manages its operations as a single segment for the purpose of assessing performance and making operating decisions. The Company’s Chief Operating Decision Maker (“CODM”) is its executive management committee. The CODM allocates resources and evaluates the performance of the Company using information about net income from operations. All significant operating decisions are based upon an analysis of the Company as operating segment, which is the same as its reporting segment. The Company will continue to evaluate for segments as it expands its operations.
Fair Value Measurements
Generally accepted accounting principles define fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and such principles also establish a fair value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):
| · | Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | |
| · | Level 2 – Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. | |
| · | Level 3 – Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable. |
The following fair value hierarchy tables present information about the Company’s liabilities measured at fair value on a recurring basis:
| Fair Value Measurements at June 30, 2026 | ||||||||||||
| Level 1 | Level 2 | Level 3 | ||||||||||
| Liabilities: | ||||||||||||
| Derivative liabilities | $ | $ | $ | |||||||||
| Fair Value Measurements at December 31, 2025 | ||||||||||||
| Level 1 | Level 2 | Level 3 | ||||||||||
| Liabilities: | ||||||||||||
| Derivative liabilities | $ | $ | $ | |||||||||
The Company had no assets valued using level 1, level 2, or level 3 inputs as of June 30, 2026 or December 31, 2025.
| 10 |
Derivative Financial Instruments
Derivatives are measured at their fair value on the balance sheet. In determining the appropriate fair value, the Company uses a binomial calculator model. Changes in fair value are recorded in the consolidated statements of operations.
Income Taxes
Income taxes are provided for the tax effects of transactions reporting in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of receivables, inventory, property and equipment, intangible assets, and accrued expenses for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Any deferred tax items of the Company have been fully valued based on the determination of the Company that the utilization of any deferred tax assets is uncertain.
The Company complies with FASB ASC 740 for accounting for uncertainty in income taxes recognized in a company’s financial statements, which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. FASB ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The Company believes that its income tax positions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position.
Revenue Recognition
We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. This standard provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific guidance. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASC 606 includes provisions within a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation.
The Company is currently developing certain leased
properties for the future development of high-performance data centers. The Company anticipates selling the leased properties once they
reach a ready to build status or lease the properties to customers after the high-performance data centers are built. The Company has
Stock-Based Compensation
The Company accounts for equity instruments issued to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718) and Equity-Based Payments to Non-employees pursuant to ASC 2018-07 (ASC 2018-07). All transactions in which the consideration provided in exchange for the purchase of goods or services consists of the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance.
| 11 |
Advertising
The Company expenses advertising costs as they
are incurred. The Company had
Deferred Offering Costs
The Company had capitalized qualified direct costs
related to its efforts to raise capital through a sale of its common stock in a private offering related to the issuance of
shares of common stock with a value of $
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, and in January 2025, the FASB issued ASU 2025-01, Clarifying the Effective Date (“ASU 2025-01”). The amendments are intended to enhance disclosures regarding an entity’s costs and expenses by requiring additional disaggregated information disclosures about certain income statement expense line items. The amendments, as clarified by ASU 2025-01, are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
NOTE 3 – Going Concern
These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At June 30, 2026, the Company had not yet achieved profitable operations and expects to incur further losses as it has suspended its operations until such time, if any, that the Company receives adequate funding, all of which raise substantial doubt about the Company’s ability to continue as a going concern. See “Note 11 Subsequent Events.” The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern.
NOTE 4 – Related Party Transactions
On February 10, 2026, the board of directors of the Company (the “Board”) approved grants to each of Charles Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company, respectively, of options to purchase up to shares of the Company’s common stock at an exercise price $ exercisable for a term of five years (the “Stock Options”). 50% of the shares underlying each Stock Option shall become vested and exercisable upon the closing of a purchase agreement between the Company, or the Company’s subsidiaries, and a solid oxide fuel cell supplier for a minimum power capacity of 100 MW, and the remaining % shall become vested and exercisable upon the closing of an AI data center site sale agreement between the Company, or the Company’s subsidiaries, and a buyer which is for a minimum capacity of 100 MW, as determined by the Company’s board of directors.
As of June 30, 2026 and December 31, 2025, the
Company owed the executive officers of the Company $
As of June 30, 2026 and December 31, 2025, the
Company owed the executive officers $
| 12 |
Effective April 7, 2025, Edgemode, assumed a
$
NOTE 5 – Joint Venture Investment
On October 15, 2025, the Company and BAIF entered
into the MOU for the purposes of organizing DC Estate Solutions Cayman Limited, a Cayman Island entity. Upon execution of the MOU, the
Company paid BAIF $
Effective January 22, 2026, the Company entered into the JVA by and among the Company, BAIF and DC Estate Solutions, which (i) amends and restates the MOU and (ii) supplements the SPV SPA. Pursuant to the SPV SPA, DC Estate Solutions acquired the equity interests of the five SPVs: (i) DC Estate Córdoba SL 300MW, (ii) DC Estate Cáceres SL 300 MW, (iii) DC Estate Vianos SL 300 MW, (iv) DC Estate Malpica SL 300 MW and (v) DC Estate Torrecampo SL 300 MW. As a result of the acquisition of the SPVs, DC Estate Solutions also acquired the Spain Leases.
Pursuant to the JVA, DC Estate Solutions shall be owned 50.1% by the Company and 49.9% by BAIF. The purpose of the JVA is to manage and coordinate the development of the Data Center sites on the properties governed by the Spain Leases. Substantially, all material decisions of the JVA and Joint Venture Company shall require the unanimous consent of the Company and BAIF. Under the JVA, the Company agreed to fund DC Estate Solutions with $3,500,000 USD as follows: (i) $250,000 USD, which was previously paid upon the execution of the MOU, (ii) $250,000 USD, which was previously paid upon execution of the SPV SPA, (iii) $375,000 USD paid on the effectiveness of a notarial public deed in Spain in connection with the transfer of the SPVs to the JVA on the Effective Date, and (iv) $2,625,000 USD payable in monthly installments of $125,000 USD commencing on March 1, 2026. The funds shall be distributed by DC Estate Solutions to BAIF. If the Company fails to make such payments, BAIF may foreclose on the pro rata amount of equity interests in the SPVs. In the event of any sale or lease of a Data Center, profits of DC Estate Solutions shall be shared equally by and between the Company and BAIF. In the event DC Estate Solutions develops the Data Centers and sells such Data Centers, BAIF will be entitled to a bonus as defined under the JVA.
The Company also agreed to grant to BAIF, or its assignee, the First Mora Option to purchase up to 250,000,000 shares of the Company’s common stock at an exercise price of $0.02 per share. The First Mora Option is fully vested and exercisable upon the grant date and terminates on the earlier of (i) five years following the date of the First Mora Option or (ii) the termination of the JVA.
Further, effective January 27, 2026, the Company, BAIF and DC Estate Solutions entered into the Addendum to the JVA to account for the development of additional data centers in (i) Villasequilla, Spain 600 MW, (ii) Tomelloso, Spain 450 MW and (iii) Tocumen, Panama 1000 MW. The Villasequilla and Tomelloso data centers shall each be owned by Spanish special purpose vehicles, DC Villasequilla SL and DC Tomelloso SL, respectively, and shall subsequently be assigned to DC Estate Solutions. The Tocumen data center shall be owned by a Panamanian special purpose vehicle, DC Tocumen SA, which shall subsequently be assigned to DC Estate Solutions. The Company, in addition to the already agreed upon $125,000 USD monthly payments, agreed to fund the development of the additional Data Centers by paying a minimum of $2,400,000 USD payable in monthly installments of $100,000 USD to DC Estate Solutions commencing on May 1, 2026 for a minimum of 24 months, thereby increasing the minimum BAIF Funding amount to a total of $11,150,000 USD. The funds shall be distributed by DC Estate Solutions to BAIF. The Company also agreed to grant to BAIF, or its assignee, the Second Mora Option to acquire 150,000,000 shares of the Company’s common stock at an exercise price of $0.02 per share. The Second Mora Option is fully vested and exercisable as of the grant date and terminates on the earlier of (i) five years following the date of the Second Mora Option or (ii) the termination of the JVA.
| 13 |
On March 23, 2026, the Company, BAIF and DC Estate Solutions entered into a second addendum (the “Second Addendum”) to the JVA. Pursuant to the Second Addendum, the parties agreed to: (1) increase the capacity of the Spain-based data centers to 4,350 MW and (2) exchange the stock options to purchase an aggregate of 400,000,000 shares of common stock of the Company issued to BAIF or its assignees issued under the JVA for 400,000,000 shares of the Company’s restricted common stock to BAIF or its assignees with such shares being fully paid and non-assessable on the date of execution of the Second Addendum. The exchange resulted in a de minimis increase in fair value and as a result no additional expense was recognized.
The Company consolidates DC Estates Solutions, as pursuant to the governing operating agreement, the Company has the power to direct the activities that most significantly impact DC Estates Solutions’ economic performance, as a result of its unconditional funding obligation. Accordingly, the Company determined that it controls DC Estates Solutions and consolidates the entity in its consolidated financial statements.
From the date of formation through June 30, 2026, the joint venture had no reportable operations. As of June 30, 2026, the balance sheet of the joint ventures consists of:
| Construction in Progress | $ | |||
| Right of use assets | ||||
| Total Assets | ||||
| Right of use liabilities | ||||
| Total Liabilities | $ | |||
NOTE 6 – Equity
Preferred shares
We are authorized to issue shares of preferred stock. Shares of preferred stock may be issued from time to time in one or more series as may be determined by our Board. The voting powers and preferences, the relative rights of each such series and the qualifications, limitations and restrictions of each series will be established by the Board. Our directors may issue preferred stock with multiple votes per share and dividend rights which would have priority over any dividends paid with respect to the holders of our common stock. In connection with the Charter Amendment (as defined below), the only outstanding preferred stock was converted into common stock. As of the date of this report, there are outstanding shares of preferred stock.
Series D
On December 10, 2025, the Company filed with the Nevada Secretary of State a Certificate of Designation of Series D Preferred Stock. Pursuant to the Series D Preferred Stock Certificate of Designation, the Board designated a new series of the Company’s preferred stock, the Series D Preferred Stock, par value $ per share. The Series D Preferred Stock Certificate of Designation authorized the Company to issue shares of Series D Preferred Stock. On December 10, 2025, the Company issued to each of the officers share of Series D Preferred stock.
Pursuant to the Series D Preferred Stock Certificate of Designation, holders of Series D Preferred Stock are entitled to vote together with the holders of common stock on all matters submitted to a vote of shareholders and each share of Series D Preferred Stock entitles the holder to voting power equal to 25.5% of the issued and outstanding shares of the Company’s common stock. The Series D Preferred Stock are not convertible, do not earn dividends, and are not redeemable.
Common shares
As of June 30, 2026, the Company has authorized shares of common stock, par value of $, and, as of June 30, 2026, has issued shares of common stock. All of the common shares have the same voting rights and liquidation preferences.
| 14 |
During the six months ended June 30, 2026, the
Company issued shares of common stock for cash proceeds of $
During the six months ended June 30, 2026, the
Company has issued an aggregate of shares of restricted common stock for services to outside consultants with an aggregate
fair value of $
During the six months ended June 30, 2026, the Company has issued an aggregate of shares of restricted common stock for the cashless exercise of an aggregate of common stock warrants held by 3 warrant holders.
During the six months ended June 30, 2026, the
Company has issued an aggregate of shares of common stock for the conversion of $
Equity Line of Credit Agreement
On September 4, 2025, the Company entered into a Securities Purchase Agreement (the “ELOC Agreement”) with an accredited investor purchaser. Pursuant to the ELOC Agreement, the Company agreed to sell, and the purchaser agreed to purchase up to $50,000,000 (the “Commitment Amount”) of the Company’s common stock, par value $0.001 per share (the “Purchase Shares”).
The transactions contemplated by the ELOC Agreement are subject to the Company registering the Investor’s resale of the Purchase Shares on a registration statement to be filed with the Securities and Exchange Commission (“SEC”). Concurrent with the execution of the ELOC Agreement, the Company entered into a registration rights agreement with the Investor (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company agreed to file a registration statement on Form S-1 (the “ELOC Registration Statement”) with the SEC covering the resale of the Purchase Shares sold under the ELOC, within 45 days of the date of execution of the ELOC Agreement and Registration Rights Agreement and to use its best efforts to have the Registration Statement and any amendment declared effective by the SEC at the earliest possible date. The registration rights granted under the Registration Rights Agreement are subject to certain conditions and limitations and are subject to customary indemnification and contribution provisions.
In connection with entering into the ELOC Agreement,
the Company agreed to immediately issue to the purchaser, restricted shares of common stock as commitment shares. The commitment
shares were recorded at their fair value based on the closing price on date of issuance, or $
During the six months ended June 30, 2026, the
Company has issued shares of common stock under the ELOC for cash proceeds of $
Stock Options
On January 22, 2026, as discussed in Note 5, the
Company granted to BAIF, or its assignee, the First Mora Option to purchase up to 250,000,000 shares of the Company’s common stock
at an exercise price of $0.02 per share. The First Mora Option is fully vested and exercisable upon the grant date and terminates on the
earlier of (i) five years following the date of the First Mora Option or (ii) the termination of the JVA. The options were valued using
the Black-Scholes option pricing model and determined to have a fair value of $
On January 22, 2026, as discussed in Note 5, the
Company granted to BAIF, or its assignee, the Second Mora Option to acquire 150,000,000 shares of the Company’s common stock at
an exercise price of $0.02 per share. The Second Mora Option is fully vested and exercisable as of the grant date and terminates on the
earlier of (i) five years following the date of the Second Mora Option or (ii) the termination of the JVA. The options were valued using
the Black-Scholes option pricing model and determined to have a fair value of $
| 15 |
On February 10, 2026, the board of directors of the Company (the “Board”) approved grants to each of Charles Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company, respectively, of options to purchase up to shares of the Company’s common stock at an exercise price equal to the closing sale price of the Company’s common stock as reported by OTC Markets on the trading day immediately preceding the date of grant, exercisable for a term of five years in furtherance of their employment agreements with the Company. Each Stock Option shall be a non-qualified option. 50% of the shares underlying each Stock Option shall become vested and exercisable upon the closing of a purchase agreement between the Company, or the Company’s subsidiaries, and a solid oxide fuel cell supplier for a minimum power capacity of 100 MW, as determined by the Board, and the remaining 50% shall become vested and exercisable upon the closing of an AI data center site sale agreement between the Company, or the Company’s subsidiaries, and a buyer which is for a minimum capacity of 100 MW, as determined by the Board.
The following table summarizes the stock option activity for the six months ended June 30, 2026:
| Options | Weighted-Average Exercise Price Per Share | |||||||
| Outstanding, December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited | ||||||||
| Cancelled/Expired | ( | ) | ||||||
| Outstanding, June 30, 2026 | $ | |||||||
As of June 30, 2026, the Company had stock options that were exercisable, that are exercisable upon meeting certain performance vesting conditions and that were in dispute. The weighted average remaining life of all outstanding stock options was years as of June 30, 2026. The Company has $ of value remaining to be expensed based upon completions of milestones. Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option and the fair value of the Company’s common stock for stock options that were in-the-money at period end. As of June 30, 2026, the intrinsic value for the options vested and outstanding was $ and $, respectively.
Stock Warrants
The following table summarizes the stock warrant activity for the six months ended June 30, 2026:
| Warrants | Weighted-Average Exercise Price Per Share | |||||||
| Outstanding, December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Exercised | ( | ) | ||||||
| Forfeited | ||||||||
| Expired | ||||||||
| Outstanding, June 30, 2026 | $ | |||||||
The weighted average remaining life of all outstanding stock warrants was years as of June 30, 2026. Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option and the fair value of the Company’s common stock for stock options that were in-the-money at period end. As of June 30, 2026, the intrinsic value for the warrants vested and outstanding was $.
| 16 |
NOTE 7 – Notes Payable and Convertible Notes Payable
Notes Payable
The Company has outstanding notes payables in
the amount of $
Convertible notes payable
On August 15, 2025, the
Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold the accredited
investor an unsecured original issue discount promissory note in the principal amount of $
On
September 2, 2025, the Company entered into a securities purchase agreement with ClearThink Capital Partners, LLC (“ClearThink”),
pursuant to which the Company sold ClearThink the “First Promissory Note” in the principal amount of $
On
September 9, 2025, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company
sold the accredited investor an unsecured original issue discount promissory note in the principal amount of $
On
September 15, 2025, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company
sold an accredited investor an unsecured original issue discount promissory note in the principal amount of $
| 17 |
On September
18, 2025, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold an
unsecured original issue discount promissory note in the principal amount of $
On September
23, 2025, the Company entered into a security purchase agreement with an accredited investor, pursuant to which the Company sold an unsecured
original issue discount promissory note in the principal amount of $
On September
23, 2025, the Company entered into a second security purchase agreement with an accredited investor, pursuant to which the Company sold
an unsecured original issue discount promissory note in the principal amount of $
On October 3, 2025, the Company entered into a
securities purchase agreement dated September 30, 2025 with an accredited investor, pursuant to which the Company sold an unsecured original
issue discount promissory note in the principal amount of $
| 18 |
On October 8, 2025, the Company issued a convertible
promissory note to an accredited investor for $
On October 9, 2025, the Company entered into the
“Second Promissory Note” with ClearThink in the principal amount of $
On November 26, 2025, we issued a convertible
promissory note dated November 20, 2025 to an accredited investor in the aggregate principal amount of $
On January 12, 2026, the Company entered into
a securities purchase agreement with an accredited investor. Pursuant to the securities purchase agreement, the Company sold the investor
an original issue discount promissory note in the principal amount of $
On January 27, 2026, the Company entered into
a securities purchase agreement with an accredited investor. Pursuant to the securities purchase agreement, the Company sold the Investor
an unsecured original issue discount promissory note in the principal amount of $
| 19 |
On February 24, 2026, the Company entered into
a securities purchase agreement with an accredited investor. Pursuant to the securities purchase agreement, the Company sold the investor
an original issue discount promissory note in the principal amount of $
On March 5, 2026, the Company entered into a securities
purchase agreement with an accredited investor. Pursuant to the securities purchase agreement, the Company sold the investor an original
issue discount promissory note in the principal amount of $
On May 20,
2026, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold an unsecured
original issue discount promissory note in the principal amount of $
On June 3, 2026, we issued a convertible promissory
note to an accredited investor in the aggregate principal amount of $
During the six months ended June 30, 2026 and
2025, the Company recorded debt discount amortization expense of $
NOTE 8 – Derivative Liabilities
The fair values of the conversion option of outstanding convertible notes payable and common stock warrants were determined to be derivative liabilities under ASC 815 due to the default on convertible notes payable disclosed above, which resulted in a variable conversion price on the outstanding convertible note payable. The fair value of the derivative liabilities was estimated using a binomial model with the following assumptions:
| As of June 30, 2026 | ||||||||
| Conversion Option | Warrants | |||||||
| Volatility | ||||||||
| Dividend Yield | ||||||||
| Risk-free rate | ||||||||
| Expected term | ||||||||
| Stock price | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Derivative liability fair value | $ | $ | ||||||
| Number of shares issued upon conversion, exercise, or satisfaction of required conditions as of June 30, 2026 | ||||||||
| 20 |
| As of December 31, 2025 | ||||||||
| Conversion Option | Warrants | |||||||
| Volatility | ||||||||
| Dividend Yield | ||||||||
| Risk-free rate | ||||||||
| Expected term | ||||||||
| Stock price | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Derivative liability fair value | $ | $ | ||||||
| Number of shares issued upon conversion, exercise, or satisfaction of required conditions as of December 31, 2025 | ||||||||
All fair value measurements related to the derivative liabilities are considered significant unobservable inputs (Level 3) under the fair value hierarchy of ASC 820.
The table below presents the change in the fair value of the derivative liability during the six months ended June 30, 2026:
| Fair value as of December 31, 2025 | $ | |||
| Establishment of derivative liability upon issuance of notes and date they became convertible | ||||
| Extinguishment due to conversion | ( |
) | ||
| Extinguishment due to repayment | ( |
) | ||
| Extinguishment due to exercise of warrants | ( |
) | ||
| Change in fair value of derivatives | ( |
) | ||
| Fair value as of June 30, 2026 | $ | |||
The total impact of derivative liabilities recognized
in the Company’s consolidated statements of operations includes the change in fair value of derivatives and the fair value of the
derivative settled upon repayment, with the Company recognizing a net loss of $
NOTE 9. Leases
On May 6, 2024, the Company entered into a lease to lease its operating and office facility under a non-cancelable real property lease agreement that expired on May 31, 2026. The real property lease contains provisions requiring payment of property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premise. As the Company’s leases do not provide implicit discount rates, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.
The components of lease expense were as follows:
| For the Three Months Ended June 30, 2026 | For the Six Months Ended June 30, 2026 | |||||||
| Operating lease cost | $ | $ | ||||||
| Total net lease cost | $ | $ | ||||||
| 21 |
Supplemental balance sheet information related to leases was as follows:
| For the Six Months Ended June 30, 2026 | ||||
| Operating leases: | ||||
| Operating lease assets | $ | |||
| Current portion of operating lease liabilities | ||||
| Noncurrent operating lease liabilities | ||||
| Total operating lease liabilities | $ | |||
| Weighted average remaining lease term: | ||||
| Operating leases | ||||
| Weighted average discount rate: | ||||
| Operating leases | ||||
Supplemental cash flow and other information related to leases was as follows:
| For the | ||||
| Six Months Ended | ||||
| June 30, 2026 | ||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||
| Operating cash flows used for operating leases | $ | |||
| Financing cash flows used for finance leases | $ | |||
| Leased assets obtained in exchange for lease liabilities: | ||||
| Total operating lease liabilities | $ | |||
| Total finance lease liabilities | $ | |||
The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities on a fiscal year basis, including common area maintenance fees, under non-cancelable operating leases as of June 30, 2026:
| Fiscal Year Ending | Minimum Lease | |||
| December 31, | Commitments | |||
| 2026 (6 months) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total future undiscounted lease payments | ||||
| Less interest | ( | ) | ||
| Present value of lease payments | ||||
| Less current portion | ||||
| Long-term operating lease liabilities | $ | |||
| 22 |
NOTE 10. Commitments and Contingencies
Legal Contingencies
On February 8, 2022, the Company was notified of a potential lawsuit related to the termination of our Advisory Panel Membership agreement with Taylor Black Wealth, Ltd. (“Taylor”). The Company engaged Taylor for assistance with capital raises and was to be partially compensated with stock options, subject to vesting. Taylor claims that the Company terminated the agreement unlawfully and therefore are still entitled to the remaining unvested options which the Company believes to be cancelled. The total number of stock options being contested is 137,473, which are still shown as issued and outstanding in Note 6 “Equity” above.
As disclosed under Note 4, the Employment Agreement between the Company and Dr. Adler was terminated following the Company’s discovery that SAPL and ACL breached material representations and warranties under the Share Exchange. Pursuant to a letter dated December 8, 2025, the Company intends to seek rescission of the Share Exchange and rescind the shares of Company common stock issued to ACL pursuant to the Share Exchange. The Company has also sent notice to Dr. Adler for the termination of the option to purchase common stock issued to Dr. Adler under the Employment Agreement and the termination of such agreement for “cause” as defined under the agreement. Among other material breaches, without limitation, the Company has discovered that the real property and material assets of SAPL were encumbered at the time of the closing of the Share Exchange and remain encumbered and subject to liens.
Florida Litigation
On January 15, 2026, the Company filed a lawsuit against SAPL and ACL in the United States District Court for the Southern District of Florida. The Company is seeking rescission of the Share Exchange and temporary injunctive relief to prevent SAPL and ACL from transferring the shares of common stock received pursuant to the Share Exchange and damages related thereto. SAPL and ACL have since filed a counterclaim and may bring additional claims.
At this time, the trial is scheduled for July 2027. The Company is unable to predict the outcome of the litigation or estimate the ultimate financial exposure, if any, that may result from the proceedings. An adverse judgment or settlement could have a material adverse effect on the financial condition and results of operations of the Company.
Nevada Litigation
On April 16, 2026, ACL filed a verified shareholder derivative action in the District Court of Clark County, Nevada against the Company’s directors, Charles Faulkner and Simon Wajcenberg, as well as the Company as a nominal defendant. The complaint alleges breaches of fiduciary duty, fraud, violations of the Nevada Securities Act, equity dilution, conversion, unjust enrichment, and civil conspiracy in connection with the Series D Preferred Stock issuance, executive compensation, and SEC filings. The relief sought includes compensatory and punitive damages, disgorgement, injunctive relief, appointment of a receiver, and a judicial declaration that the Series D Preferred Stock issuance was invalid. The Company and its directors moved to dismiss the case. On July 9, 2026, the court heard arguments and granted dismissal of the lawsuit. A formal order of dismissal was entered on August 10, 2026.
| 23 |
NOTE 11 – Subsequent Events
Common Share issuances
Subsequent to June 30, 2026, the Company has issued 8,392,077 shares of restricted common stock to a private investor for cash proceeds of $25,000.
Subsequent to June 30, 2026, the Company has issued 503,178,900 shares of common stock for the conversion of $357,578 in principal on outstanding convertible notes.
Authorized Share Increase
Subsequent to June 30, 2026, and effective August 13, 2026, the Company filed a certificate of amendment to its Articles of Incorporation, as amended, increasing the Company’s authorized shares of common stock from 7,000,000,000 to 56,000,000,000.
| 24 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements, and the notes thereto, and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The following discussion and analysis compares our consolidated results of operations for three months ended June 30, 2026 (the “2026 Quarter”) with those for the three months ended June 30, 2025 (the “2025 Quarter”) and our consolidated results of operations for the six months ended June 30, 2026 (the “2026 Period”) with those for the six months ended June 30, 2025 (the “2025 Period”).
Cautionary Note Regarding Forward-Looking Statements
This report contains “forward-looking statements.” These statements include, among other things, statements regarding expanding our business and our liquidity as well as other statements regarding our future operations, financial condition and prospects, and business strategies. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially and adversely from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our ability to raise capital to buy crypto mining machines we have commitments to purchase, regulatory issues which affect our business model, and those discussed under the caption "Risk Factors" in our Form 10-K for the year ended December 31, 2025 and those discussed in other documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Business Overview
Edgemode, Inc. was incorporated under the laws of the State of Nevada in 2011. Our subsidiary, Edgemode Wyoming, was incorporated in the State of Wyoming in March 2020. Between 2021 and 2023, we attempted to become a key figure in Bitcoin mining but lacked the necessary funding to finance the purchase of Bitcoin mining hardware and hosting contracts. As a result, since late 2023 and throughout 2024 and 2025, our business activities primarily consisted of identifying and evaluating suitable acquisition transaction candidates, which led to our now-planned strategic transition from cryptocurrency mining to artificial intelligence (“AI”) data center and energy infrastructure development.
On October 15, 2025, the Company and Blackberry AIF (“BAIF”) entered into a memorandum of understanding (the “MOU”) for the purposes of organizing DC Estate Solutions Cayman Limited, a Cayman Island entity (“DC Estate Solutions”) which was organized by the Company on October 23, 2025. On November 6, 2025, DC Estate Solutions and BAIF entered into a share purchase agreement (the “SPV SPA”). DC Estate Solutions was initially owned and controlled 75% by the Company and 25% by BAIF. The principal of BAIF is Jose Mora. DC Estate Solutions has acquired five property leases, which were previously assigned to and held by BAIF, consisting of 100 hectares of land each located in the Spain cities of Malpica, Caceres, Vianos, Cordoba and Torrecampo (the “Spain Leases”). The Spain Leases are held by wholly owned subsidiaries of DC Estate Solutions. The Spain Leases are for an average term of 35 years at an initial total average cost of $96,000 per month for all sites. As a condition of each lease, the payments are subject to meeting certain milestones, such as obtaining favorable urban compatibility reports and connection points. Under the terms of the Spain Leases, the Company will pay approximately $15,000 to the owners of the Cordoba site in 2026. No further payments are expected in 2026.
The Company and BAIF intend to use the Spain Leases to develop and operate HPC data center sites. The Company paid BAIF $250,000 upon execution of the MOU and an additional $250,000 on the closing of the SPV SPA. The Company intends to develop the sites as gas powered fully autonomous energy islands for Tier 3 level uptime AI data centers. The total capacity to be developed across the five sites is anticipated to be up to 1.8 Gigawatts. We believe that since the sites will be autonomous energy islands, no grid connection is required and there will be no material reliance on grid infrastructure, thereby, subject to financing, reducing time to power for our data center clients to 18 months. The total capacity of the sites is planned to be 360 MW per site. An application to connect to the local gas pipeline for gas supply has already been made and approval has been received. The Company is negotiating a power purchase agreement with an energy company to develop a 360MW gas Solid Oxide Fuel Cell facility to convert gas fuel into electricity. The Company will need to secure fibre connections, environmental permits and all necessary contractor permits. The sites will then be classed at Ready to Build (“RTB”) as the Company intends to sell the sites on a RTB basis. We estimate the Company will require $5 million of working capital to achieve full RTB status on all five sites. Additional capital is required to develop the sites and the further development of the data centers to RTB will require substantial capital. There are no assurances that the Company will receive sufficient capital or will receive capital on reasonable terms. In addition, there are no assurances the application and permits will be received or that agreements will be completed or the data centers ultimately developed and sold or become operational.
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The Company’s goal is to utilize the assets we have acquired via the purchase of BAIF sites to develop AI data center and energy infrastructure, which will provide consistent dollar-based revenue and which represent substantially less risk than our historical digital asset self-mining operations. Our intent is to focus our business on development and marketing efforts to build data centers and expand our AI data center customer base.
Effective January 22, 2026, the Company entered into a Joint Venture Agreement (the “JVA”) by and among the Company, BAIF and DC Estate Solutions, which (i) amends and restates the MOU and (ii) supplements the SPV SPA. Pursuant to the SPV SPA, DC Estate Solutions acquired the equity interests of five special purpose vehicles (the “SPVs”): (i) DC Estate Córdoba SL 300MW, (ii) DC Estate Cáceres SL 300 MW, (iii) DC Estate Vianos SL 300 MW, (iv) DC Estate Malpica SL 300 MW and (v) DC Estate Torrecampo SL 300 MW. As a result of the acquisition of the SPVs, DC Estate Solutions also acquired the Spain Leases.
Pursuant to the JVA, DC Estate Solutions shall be owned and controlled 50.1% by the Company and 49.9% by BAIF. The purpose of the JVA is to manage and coordinate the development of high-performance computing data center (the “Data Centers”) sites on the properties governed by the Spain Leases. Substantially, all material decisions of the JVA and Joint Venture Company shall require the unanimous consent of the Company and BAIF. Under the JVA, the Company agreed to fund DC Estate Solutions with $3,500,000 USD as follows: (i) $250,000 USD, which was previously paid upon the execution of the MOU, (ii) $250,000 USD, which was previously paid upon execution of the SPV SPA, (iii) $375,000 USD paid on the effectiveness of a notarial public deed in Spain in connection with the transfer of the SPVs to the JVA on the Effective Date, and (iv) $2,625,000 USD payable in monthly installments of $125,000 USD commencing on March 1, 2026. The funds shall be distributed by DC Estate Solutions to BAIF. The Company also agreed to grant to BAIF, or its assignee, a non-qualified option to purchase up to 250,000,000 shares of the Company’s common stock (the “First Mora Option”) at an exercise price of $0.02 per share. The First Mora Option is fully vested and exercisable upon the grant date and terminates on the earlier of (i) five years following the date of the First Mora Option or (ii) the termination of the JVA.
Additionally, pursuant to the JVA, DC Estate Solutions’ equity interests in the SPVs are subject to the Company making minimum aggregate cash payments and contributions to DC Estate Solutions (including amount payable under the SPV SPA) in the amount of $8,750,000 USD, which shall be distributed to BAIF (the “BAIF Funding”). If the Company fails to make such payments, BAIF may foreclose on the pro rata amount of equity interests in the SPVs. In the event of any sale or lease of a Data Center, profits of DC Estate Solutions shall be shared equally by and between the Company and BAIF. In the event DC Estate Solutions develops the Data Centers and sells such Data Centers, BAIF will be entitled to a bonus as defined under the JVA.
Further, effective January 27, 2026, the Company, BAIF and DC Estate Solutions entered into an addendum to the JVA (the “Addendum”) to account for the development of additional Data Centers in (i) Villasequilla, Spain 600 MW, (ii) Tomelloso, Spain 450 MW (collectively, with the above-mentioned Spain Leases, the “Spain Leases”) and (iii) Tocumen, Panama 1000 MW (the “Panama Lease”). The Villasequilla and Tomelloso data centers shall each be owned by Spanish special purpose vehicles, DC Villasequilla SL and DC Tomelloso SL, respectively, and shall subsequently be assigned to DC Estate Solutions. The Tocumen data center shall be owned by a Panamanian special purpose vehicle, DC Tocumen SA, which shall subsequently be assigned to DC Estate Solutions. The Company, in addition to the already agreed upon $125,000 USD monthly payments, agreed to fund the development of the additional Data Centers by paying a minimum of $2,400,000 USD payable in monthly installments of $100,000 USD to DC Estate Solutions commencing on May 1, 2026 for a minimum of 24 months, thereby increasing the minimum BAIF Funding amount to a total of $11,150,000 USD. The funds shall be distributed by DC Estate Solutions to BAIF. The Company also agreed to grant to BAIF, or its assignee, an additional stock option to acquire 150,000,000 shares of the Company’s common stock (the “Second Mora Option”) at an exercise price of $0.02 per share. The Second Mora Option is fully vested and exercisable as of the grant date and terminates on the earlier of (i) five years following the date of the Second Mora Option or (ii) the termination of the JVA.
On March 23, 2026, the Company, BAIF and DC Estate Solutions entered into a second addendum (the “Second Addendum”) to the JVA. Pursuant to the Second Addendum, the parties agreed to: (1) increase the capacity of the Spain-based data centers to 4,350 MW and (2) exchange the stock options to purchase an aggregate of 400,000,000 shares of common stock of the Company issued to BAIF or its assignees issued under the JVA for 400,000,000 shares of the Company’s restricted common stock to BAIF or its assignees with such shares being fully paid and non-assessable on the date of execution of the Second Addendum.
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Effective April 7, 2025 (the “Effective Time” or “Closing Date”), the Company and Synthesis Analytics Production Ltd. (“SAPL”) and Adler Capital Limited (“ACL”) closed on a Share Exchange Agreement dated April 7, 2025 (the “Share Exchange”) and an employment agreement between the Company and Dr. Niclas Adler (the “Employment Agreement”). In accordance with the Share Exchange, SAPL agreed to transfer 100% of SAPL’s outstanding capital stock to Edgemode in exchange for 1,260,246,354 shares of Edgemode common stock, par value $0.001 per share, which represented approximately 55% of the Company’s outstanding common stock at the Effective Time. The Company accounted for the acquisition as an asset acquisition under ASC 805 as SAPL did not meet the definition of a business as it did not contain a full set of integrated inputs and outputs at the time of closing.
Following the closing of the Share Exchange, Edgemode, through SAPL, its wholly owned subsidiary, began designing, building, and operating digital infrastructure for HPC with the goal of becoming a leading provider of digital colocation services. The acquisition of SAPL enabled the Company to begin to leverage SAPL’s existing infrastructure and expertise to meet the growing demand for data center facilities for third-party customers focused on cloud computing as well as machine learning and artificial intelligence.
In or around May 2025, the Company discovered that Synthesis Analytics Production Ltd. and ACL breached material representations and warranties under the Share Exchange. The Employment Agreement was terminated on or about September 1, 2025, upon Dr. Adler’s resignation. Pursuant to a letter dated December 8, 2025 and a complaint filed by the Company in the United States District Court for the Southern District of Florida, the Company intends to seek rescission of the Share Exchange and rescind the shares of Company common stock issued to ACL pursuant to the Share Exchange and the Company has sent notice to Dr. Adler for the termination of the option to purchase common stock issued to Dr. Adler under the Employment Agreement and the termination of such agreement for “cause” as defined under the agreement. Among other material breaches, without limitation, the Company has discovered that the real property and material assets of SAPL were encumbered at the time of the closing of the Share Exchange and remain encumbered and subject to liens.
On June 3, 2026, the Company entered into a non-binding term sheet with Ibersun Generacion, S.L. (“Ibersun”) pursuant to which the Company was to acquire 51% of the equity interests in Ibersun. The Company subsequently terminated the term sheet.
Business Strategy
Our business focus is to generate revenue and achieve profitability by building large-scale data center infrastructure configured for specialized computers performing specific, high-value applications such as cloud computing, machine learning, and artificial intelligence and maximizing the use of assets acquired in a recent acquisition. We intend to strategically develop and to work to make operational the infrastructure necessary to support our contractual commitments to our HPC customers and to support expected customer growth and additional demand by leveraging our data center expertise and capabilities. We intend to seek additional opportunities and to engage additional customers in the HPC hosting market to expand our business using our knowledge, expertise, and existing and future infrastructure where favorable market opportunities exist. We have not yet generated any revenues to date and require significant financing to develop our business.
Our strategy is focused on hyperscale cloud-based providers and enterprises, including potential customers that we believe have significant data center infrastructure needs that have not yet been outsourced or will require additional data center space and power to support their growth and their increasing reliance on technology infrastructure in their operations. We believe our capabilities for serving the needs of large hyperscale providers and enterprises will continue to enable us to capitalize on the growing demand for outsourced data center facilities in our markets and in new markets where our customers are located or plan to be located in the future. There are no assurances that we will raise sufficient capital to execute our business plan or satisfy our liabilities. See the “Risk Factors” in our Form 10-K for the fiscal year ended December 31, 2025 and Form 8-K Current Report dated April 13, 2026.
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Products and Services
AI Data Center Infrastructure Development
HPC is a technology that uses clusters of powerful processors that work in parallel to process massive data sets and solve complex problems at extremely high speeds. The proliferation of data, as well as data-intensive and AI enabled applications and use cases, is driving demand for the computing power of HPC. Traditionally, HPC has involved an on-premises infrastructure, investing in supercomputers or computer clusters.
Our AI Data Center Infrastructure revenue will be generated by licensing colocation data center space and related services to a licensee at the Data Centers in Spain and Panama. Clients may choose to acquire our sites at RTB or contract with us to build the data center on our site to their specification and enter into a license agreement. These licensing agreements and orders include lease components, non-lease components (such as power delivery, physical security, maintenance and other billable expenses), as well as non-component elements such as taxes. Under these contracts, customers pay fixed payments (based on electric capacity) and variable payments on a recurring basis. HPC colocation leases may include all or portions of a data center, where customers may also lease office space to support their colocation operations where revenue is primarily based on power usage as well as square footage.
On January 21, 2025, the Company entered into the Master Services Agreement with Cudo Ventures Ltd, a cloud computing company (“Cudo”). Under this agreement, the Company agreed to provide Tier 3 data center hosting infrastructure and colocation services to Cudo. The Master Services Agreement supported a 1 MW capacity during a five year term at our previously planned Marviken data center. On February 18, 2025, Cudo made an initial payment of $303,549 to the Company consisting of a $227,662 deposit, which was intended to be refundable at the end of the term of the Master Services Agreement, and the first month’s rental payment of $75,887. The initial payment was primarily used to buildout the data center, including installing electrical and other infrastructure in order to support Cudo’s hardware through the advance of $183,000 to SAPL. The Master Services Agreement term commenced on April 8, 2025 when Cudo’s hardware was delivered to our data center. However, as a result of the Company’s intention to rescind the SAPL Share Exchange, the Master Services Agreement was terminated and the Company is obligated to refund the deposit paid thereunder.
Critical Accounting Policies and Estimates
We discuss the material accounting policies that are critical in making the estimates and judgments in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, under the caption “Management’s Discussion and Analysis—Critical Accounting Policies and Estimates.” There has been no material change in critical accounting policies or estimates during the period covered by this report.
Recent Accounting Pronouncements
For information on recent accounting pronouncements and impacts, see Note 1 to the unaudited condensed consolidated financial statements.
Three Months Ended June 30, 2026 Compared to the Three Months Ended June 30, 2025
Results of operations
Our operating expenses for the 2026 Quarter were $1,322,122 compared to $3,262,408, for the 2025 Quarter, a decrease of 61%. In the 2026 Quarter, the Company incurred stock-based compensation expense of $37,000 compared to $26,250 for the 2025 Quarter. The stock-based compensation for the 2026 Quarter was related to shares issued to our newly elected board member services performed.
Our other expense for the 2026 Period was $1,983,014 compared to other expense of $564,873 for the 2025 Quarter. Other expenses in the 2026 Period were comprised primarily of $1,277,679 in interest expense and $705,807 for the loss on the change in fair value of derivative liabilities. Other expenses in the 2025 Period were comprised of $20,377 in interest expense, $396,443 for the loss on the change in fair value of derivative liabilities and $148,053 on the loss on settlement of debt.
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Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
Results of operations
Our operating expenses for the 2026 Period were $15,564,954 compared to $25,377,549, for the 2025 Period, a decrease of 39%. In the 2026 Period, the Company incurred stock-based compensation expense of $13,255,936 compared to $24,273,137 for the 2025 Period. The stock-based compensation for the 2026 period was related to common shares issued for acquisition related costs and shares issued to our director compared to the 2025 Period which was related to the amendment of options to the officers of the Company and issuance of shares to an outside consultant.
Our other income for the 2026 Period was $6,540,751 compared to other income of $678,187 for the 2025 Period. Other income in the 2026 Period was comprised primarily of $2,479,112 in interest expense and $9,018,915 for the gain on the change in fair value of derivative liabilities. Other income in the 2025 Period was comprised of $31,564 in interest expense, $857,804 for the gain on the change in fair value of derivative liabilities and $148,053 on the loss on settlement of debt.
Liquidity and Capital Resources
As of August 14, 2026, the Company had approximately $25,000 of cash on hand. Historically, our liquidity was primarily derived from debt and equity investments from accredited investors. During the year ended December 31, 2025, we received an initial payment of approximately $303,000 for colocation services to be provided by the Company. In addition, during the year ended December 31, 2025, we sold 45,177,578 shares of restricted common stock to accredited investors in consideration of $500,000. On April 7, 2025, we executed the Share Exchange with SAPL. On October 15, 2025, we entered into a binding memorandum of understanding with BAIF to acquire five properties in Spain and we are now seeking to raise at least $5,000,000 to commence our HPC hosting operations and develop our gas powered AI data centers and generate revenue. We require significant funding to develop our HPC operations. Furthermore, potential legal proceedings relating to SAPL and its affiliates may cause us to incur significant expenses or liability. Adverse outcomes in such proceedings or claims could result in significant liabilities which may materially affect our financial condition, results of operations, or cash flows. We have received cash proceeds of $1,327,000 from the issuance of convertible notes payable during 2025 and an additional $700,500 in 2026 through August 14, 2026. Subject to receiving funding, we expect that our operating expenses will increase as we attempt to develop our new HPC operations and we will devote additional resources toward new business opportunities. However, as set forth elsewhere in this report, our ability to develop our business and achieve our operational goals is dependent upon our ability to raise significant additional working capital. As the availability of this capital is unlikely, at this time, we are unable to quantify the expected increases in operating expenses in future periods.
On September 4, 2025, the Company also entered into a Securities Purchase Agreement (the “ELOC Agreement”) with an accredited investor purchaser. Pursuant to the ELOC Agreement, the Company agreed to sell, and the purchaser agreed to purchase up to $50,000,000 (the “Commitment Amount”) of the Company’s common stock, par value $0.001 per share (the “Purchase Shares”). We have received cash proceeds of $702,125 from the issuance of common shares during six months ended June 30, 2026.
Summary of cash flows
| June 30, 2026 | June 30, 2025 | |||||||
| Net cash provided by (used in) operating activities | $ | (1,181,372 | ) | $ | (43,487 | ) | ||
| Net cash used in investing activities | $ | (425,500 | ) | $ | (230,915 | ) | ||
| Net cash provided by (used in) financing activities | $ | 1,375,215 | $ | 290,100 | ||||
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During the 2026 Quarter and the 2025 Quarter, our sources and uses of cash were as follows:
Operating Activities
During the 2026 Period, cash used in operating activities of $1,181,372 primarily resulted from the net loss of $9,024,203 offset by stock-based compensation of $13,255,936, amortization of debt discount of $752,794, interest expense from derivative liabilities, default provisions and true-up obligations of $1,647,450 and the gain on the change in the fair value of derivative liabilities of $9,018,915.
During the 2025 Period, cash used in operating activities of $43,487 primarily resulted from the Prepaid AI hosting services (customer deposits), offset by the net loss of $24,699,362 and stock-based compensation of $24,273,137, and change in the fair value of derivative liabilities of $857,804.
Investing Activities
During the 2026 Period, the Company used $425,500 of cash for the development of the leased assets in the joint venture with DC Estate Solutions under the JVA.
During the 2025 Period, the Company paid $47,915 of cash for assets in the construction of the HPC facility as well as $183,000 in connection with the acquisition of SAPL.
Financing Activities
During the 2026 Period, the Company received $852,135 in cash proceeds in connection with the sale of shares of common stock of the Company pursuant to the ELOC Agreement and private placements, and $700,500 in proceeds from convertible notes payable, offset by repayments of convertible notes of $177,420.
During the 2025 Period, the Company received $300,000 in cash proceeds in connection with the sale of shares of common stock of the Company, offset by repayments of related party advances of $9,900.
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Not applicable.
| ITEM 4. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures. We are required to maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on their evaluation as of the end of the period covered by this report, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were not effective to ensure that the information relating to our company and required to be disclosed in our SEC reports is (i) recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures as a result of material weaknesses in our internal control over financial reporting resulting from limited segregation of duties and limited multiple levels of review in the financial close process, along with a lack of well-established policies and procedures to identify, approve, and report related party transactions.
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We will continue to monitor our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. We do not, however, expect that the material weaknesses in our disclosure controls will be remediated until such time as we have added additional personnel, including additional accounting and administrative staff, allowing improved internal control over financial reporting.
Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
| ITEM 1. | LEGAL PROCEEDINGS |
The Company is currently party to certain legal proceedings as described in Note 10 “Commitments and Contingencies” to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
| ITEM 1A. | RISK FACTORS |
While we attempt to identify, manage, and mitigate risks and uncertainties associated with our business to the extent practical under the circumstances, some level of risk and uncertainty will always be present. Our “Risk Factors” in the Form 10-K for the fiscal year ended December 31, 2025 and Form 8-K Current Report dated April 13, 2026 describe some of the risks and uncertainties associated with our business, which we strongly encourage you to review. These risks and uncertainties have the potential to materially affect our business, financial condition, results of operations, cash flows, projected results, and future prospects. There have been no material changes in our risk factors from those disclosed in the Form 10-K for the fiscal year ended December 31, 2025.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Except as otherwise previously disclosed or provided below or previously disclosed in our SEC reports, there were no unregistered sales of the Company’s equity securities during the six months ended June 30, 2026.
During the three months ended June 30, 2026, the Company has issued 10,000,000 shares of restricted common stock for services to the non-employee board member. On the date of issuance, the shares are fully earned and non-forfeitable. The shares were issued in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act and contain a legend restricting their transferability, absent registration or applicable exemption.
During the three months ended June 30, 2026, the Company issued an aggregate total of 574,979,856 shares of restricted common stock to unaffiliated, accredited investors in consideration of the conversion of approximately $160,000 in principal on outstanding convertible notes payable. The shares were issued in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act and contain a legend restricting their transferability, absent registration or applicable exemption.
During the three months ended June 30, 2026, the Company issued 15,384,615 shares of restricted common stock under the ELOC for gross cash proceeds of $70,000. The shares were issued in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act and contain a legend restricting their transferability, absent registration or applicable exemption.
On June 19, 2026, the Company issued 133,479,310 shares of restricted common stock under the true-up provisions to the inducement shares issued in connection with a Securities Purchase Agreement dated September 18, 2025 with an accredited investor. sThe shares were issued in reliance upon an exemption from registration provided by Section 4(a)(2) of the Securities Act and contain a legend restricting their transferability, absent registration or applicable exemption.
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
None.
| ITEM 4. | MINE SAFETY DISCLOSURES |
Not Applicable.
| ITEM 5. | OTHER INFORMATION |
During the quarter ended June 30, 2026, no director
or officer of the Company
| ITEM 6. | EXHIBITS |
The exhibits listed in the accompanying “Index to Exhibits” are filed or incorporated by reference as part of this Form 10-Q.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Dated: August 14, 2026
| EDGEMODE, INC. | |
|
By: /s/ Charlie Faulkner Charlie Faulkner Chief Executive Officer (Principal Executive Officer)
By: /s/Simon Wajcenberg Simon Wajcenberg Chief Financial Officer (Principal Financial and Accounting Officer) |
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EXHIBIT INDEX
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+ Exhibits and/or Schedules have been omitted. The Company hereby agrees to furnish to the Staff of the Securities and Exchange Commission upon request any omitted information. Copies of this filing (including the financial statements) and any of the exhibits referred to above will be furnished at no cost to our shareholders who make a written request to Edgemode, Inc., 110 E. Broward Blvd., Suite 1700, Ft. Lauderdale, FL 33301; Attention: Corporate Secretary.
* Management contract or compensatory agreement plan or arrangement.
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